Working people in Thailand are burdened by the highest household debts in eight years. Many Thais struggle to make ends meet on a daily basis and turn to loan sharks.
A poll by the University of the Thai Chamber of Commerce (UTCC) shows that 95,9 percent of the 1.212 respondents are in debt. These mainly arise from daily expenses and the purchase of luxury goods or a means of transport. The survey mainly focused on workers earning less than 15.000 baht per month.
The average debt per household is 119.062 baht, the highest amount in eight years. Last year, households owed 117.840 baht. The majority (60,6 percent) consists of informal loans, which is also 59,6 percent more than last year.
Thanavath Phonvichai, vice president of research at UTCC, is particularly concerned about the increase in loans in the black market. He believes that the government should quickly come up with measures such as raising the minimum income of working people. The minimum daily wage of 300 baht must be increased to 356 baht, an amount that, according to the UTCC, is the minimum amount required to make ends meet.
Respondents also want the government to raise the minimum daily wage and lower the cost of living. There are also concerns about possible unemployment due to the poor economic outlook.
I also took a look at the relevant article in the Bangkok Post and the UTCC website. The causes of the debt are mentioned there: daily expenses, means of transport and mortgages for housing. Purchase of luxury goods is NOT listed and that is also my experience. I see people borrowing extra money for things like necessary daily expenses, repairs, school fees, cremations, a motorcycle, etc. Borrowing money for luxury goods such as iPhones is a rarity except among the upper middle class. The others buy a 5.000 baht Samsung.
Private debt in Thailand is 85 percent of Gross National Income (over 200 percent in the Netherlands). That is not much at all if the economy is running reasonably well and if not so many (60 percent) of the loans are taken out with money loan sharks who charge 20-100 percent interest per year and seize the collateral (land or house) in the event of non-payment . Threats are also common. Poor people don't have access to a bank with 5-10 percent interest, that's the biggest problem.
http://www.bangkokpost.com/business/news/952181/workers-debts-keep-piling-up
Buying a means of transport and a house is of course a luxury. Especially if you have to live on the minimum daily wage. You don't necessarily need a scooter or car. A mortgage certainly not, what do you have to pay for it?
Come, come Khun Peter. A very simple old house in the countryside (two small rooms, kitchen and outdoor toilet/washing area) costs between 200.000 and 300.000 baht. (15 years ago I bought a big house with 10 rai of land for 1.000.000 baht). Add a motorai and I think you will spend between 2.000 and 3.000 baht per month on interest and repayment. Can just work with a minimum daily wage and certainly if both man and woman. I don't think that's a luxury. But if there are suddenly unforeseen expenses, then you have a big problem.
I don't want to write ugly. But where can a single poor young man get 200.000 -300.000 baht from, who works like crazy in a large company of sales material for construction. 250 per day. And no scooter? How do you bridge the 35 km where there is no transport to go to work? I think you live in Thailand (15 years) But certainly not aware of what is really going on .Chang Rai ,Village Phu su Fha Every day 35 km to get to work.We also support there a little bit with some money.Also given a scooter.Why do you think homemade alcohol is widely used?We throw our money really not over the bar, but trying to contribute a little to a better life. The young man lives in a hovel that was once cobbled together by his grandfather. We had the whole mess refurbished with some furniture TV laptop a normal bed Costs are negligible.
Moderator: You put a lot of periods and commas in the wrong place, making the comment unreadable.
They don't have to live in a big house anyway. If you have to live on a small wage, you rent a room. There are plenty of thai who rent a room. they are ready for 2000 baht. If you start earning more you can still live in a house.
Totally agree Tino Kuis, moreover, a simple house is usually paid for by several family members, including the older children, and this is no different with a means of transport. You often see entire families sitting on a pick-up, and this is unfortunately no different with a moped.
Don't forget that everyone who lives in Thailand indirectly benefits from poverty. If welfare for the lowest paid were to increase rapidly, Thailand would become too expensive for expats and pensioners. In addition, most expats choose to live in Thailand because they do not have to pay taxes. They also contribute nothing to poverty reduction. If you really care about the poor Thai you should transfer a third of your income to the Thai government. They can then use it to fight poverty.
Pattaya Rent a cheap room for a Thai who works and earns only 9000 per month, but works 260 hours per month. The room costs 3000 bath. Only a shower and bed. You also have a hutch for 1000 bath, no electricity and no shower. First monthly wage 5906 bath. The first week was on duty from 13-22. Then 3 weeks of night shift from 22 pm to 08 am Month of April. We went to have a look at 7 eleven at night. no money either. Also pay for 23 shift shirts yourself:: 2 bath. Quarrel in a bar. Girl takes off her shift shirt from 400 eleven Under the shirt a sexy blouse, and puts on a lot of make up. The bar ladies took that not and threw her out of the bar. Yes, how come girls end up there. Also applies to the boys who work in Boystown.
I disagree with you about a scooter. Our gardener with his wife and child have no other means of transport and are dependent on the motorcycle. How else is he supposed to go to work? There are no buses here, if you live and work outside the city, you have little choice
A means of transport a luxury? In the Isaan, (where most people are poor), you need at least a scooter. At least 2 for a large family (being taken to school, doing the shopping, going to relatives…). Public transport in the countryside does not exist, does it? Calling this a luxury is a blow to the poor.
If you don't have money, you don't buy a 5000 baht samsung, but a 500 baht second-hand phone
The banks still charge between 6% and 7% mortgage interest, this is a high cost item for the Thai, which must be paid every month if you pay too late, the banks charge a fairly high fine, in summary, the living costs for a Thai are unnecessarily high .
A good friend 23 years old, works a month at 7/11 gets his pay slip 5906 bath Works 1 week day shift 13 -22 hours 3 weeks night shift in a row. The young man now hopes that next month he will receive the 9000 bath that was promised for a month's work If we don't help, the young man will perish
Banks in Thailand, including the government banks, systematically "sell" loans to people in rural villages where a blind person can see that those people will never be able to repay such a loan. The banks do this by sending commercial agents door-to-door to push these kinds of loans, assertively, almost aggressively.
Villagers use the money at best to buy a car or a house. The money is often used to purchase much less durable consumer goods. In many cases, the money is used to fill financial drains already made by loansharks.
The banks demand, and receive, collateral from the borrower or his family, preferably real estate. The banks know almost in advance that they will get possession of that real estate. In this way they literally buy the land for next to nothing.
I recently helped my Thai son-in-law and daughter-in-law for 250.000 baht by repaying such a loan early at GHB bank. They had taken out the loan to pay her father's hospital bill and pay off an even more expensive loan from a loanshark. They had taken out that loan to pay the school fees for their children. They had mortgaged their properties, a modest house and approximately 2 rai of rice field, to the bank. They threatened with seizure because they could not pay off the loan sufficiently.
In recent years, it has become increasingly difficult, even impossible, to earn a living income in rural villages. It is more and more survival. There is too little work. The problems in the primary agricultural sector affect the entire population. Successive governments, irrespective of their color, took measures that cost a lot of public money and proved very ineffective. These policy choices add to the misery of the population. They literally burp backwards.
The local (construction) entrepreneurs hardly work with Thai workers because Cambodian and Laotian (illegal guest) workers want to work even harder for less than 300 baht. There is no sign of any enforcement policy and the arrival of the military has not remedied that either, despite (or is it because of?) all the nice talk.
a motorcycle is necessary if you live or work remote.
And that young man of 23, ? does he live alone? does he have a family?
Of course many people are having a hard time, but is that different with us?
1 big problem is also that thai can not handle money.
I see that with our gardener too. Have a low income, but take 3 days unpaid leave.
So 1000 baht less wages. If you're really tight, you don't. 3 days paid Songkran are also good. But tomorrow he will be surprised when he gets his pay
I know a lot of people in Thailand that I consider 'middle class'. 'normal families' who try to get by on less than 15.000 THB a month. I know many singles and young people who are happy with 6 to 10.000 THB per month. I myself have 2 adult daughters living in Thailand, if I don't support them financially, they won't make ends meet while working full time. I read in previous articles and the article above about average incomes for Thai, amounts that I do not recognize at all with the reality as far as I know it after living in Thailand for 20 years. The car I have in Thailand is not new and paid for in cash, well maintained and no more than a reliable 'means of transport'. I teach my children not to buy anything on credit. If they think they really need something, save for it first. If they don't need a car, don't buy it. There is a difference if you need a car for work and you earn money from it or you buy a car for luxury and even just for show. In the latter case it is wasted money.
I know many farmers. including my daughter's in-laws who have a Rubber and Rice farm in Buengkan district. They can no longer sell the rubber and receive no government aid. They have lost their income and have borrowed from the bank. The father-in-law died of stress (smoking) and my son-in-law actually has to go back from Bangkok to the village to help the mother. But now he sends money to his mother every month from what he earns in Bangkok. Before he can generate income from the Farm, he has to borrow money or save money first because he will have to invest again. I advise him to choose different crops. Something for the short term to have cash flow and something for the longer term. They did the same with the rubber trees. When I was there in 2011 they had a large number of young 2 year old and 4 year old trees but that is all wasted money or….I don't know what the wood is suitable for? Many farmers are struggling with the drought and will undoubtedly lose money instead of being able to provide for their 'livelihood' and pay off loans. The government is now talking about a 'sale project' to 'Landlords' so that the farmers lose their land. Who gets better? The income limit that is spoken of is unrealistic in most of Thailand! If the daily wage has to be THB 300 or more, who is going to pay the households, such as farmers, so that they can make ends meet? government? The information they provide does not correspond to reality and is comparable to Mourice de Hond in the Netherlands, who comes up with results from his studies that would apply to the average Dutch person, but he has never spoken to me!
Unfortunately, for the Thai it is always difficult to handle money,
one to another wants a nice Hi Lux Toyota to enter a rice field,
sometimes this is not wisdom, how can you work with it?
problems caused by luxury items, smartphones, fancy pickups, etc.
unlimited bbq food outside the door, sanook,
we want to join will sit on blisters,
however, there are those who can afford it
Anyone can 'get in' by the way, only sit out…
The problem is not in the luxury goods, but in the buyers' position of power.
The farmers do not receive a realistic price for their goods (just like in the Netherlands).
They simply cannot make a profit.
My girlfriend has been looking for work for some time now. The most important condition for us is a decent number of hours, because I'm also there to contribute financially and we also want a family life, so a 'high' salary is not necessarily necessary.
Last two applications (Nang Rong, Buriram):
assistant cook in a thriving restaurant: 270 THB per day for 12 hours of work and 1 (unpaid) day off. Monthly wage so about 7000 tbh to work 72 hours a week.
– administration/reception for a company that installs air conditioning: 15000 THB per month, working hours from 7 a.m. to 21 p.m. (14 hours a day)
The statutory minimum daily wage is a dead letter. Many also work 7 on 7.
@ Nicole: That it is also tough in NDL or VL nowadays, I agree, but the comparison with the worker or farmer or momshop (destroyed by the many markets) is absolutely not valid. People have a hard time in VL or NDL, but everyone is provided with the minimum comfort there. How Thais handle their money is irrelevant here.
Here in the “richer” South, too, ordinary people are deteriorating sharply. The prices of rubber and palm oil have really collapsed and the harvest barely yields anything. Farmers who have to rent land do not even come out of the production costs. Those who own the land work virtually for free.
It could be even more dramatic next year, due to this year's persistent drought resulting in crop failures. I don't think the burden of debt is due to the fact that people in rural areas live beyond their means. And call a moped a “luxury” ??? How are those people supposed to go to work, sometimes 20 km or more from their home? By public transport which is not available to Pluto's lair? A good measure would already be that "minimum" wages are already paid, because many do not even get this. Raising the minimum wage will also lead to all living products becoming more expensive…. Isn't that called inflation?
Putting the cart before the horse!
How about raising wages? Foreign investors can no longer keep their companies profitable after the last wage increase. And leave for Canbodia or Vietnam. And complain that exports are disappointing.
Do these laid-off workers have a state safety net? Or are they forced to return to their parental roots in the province.
I often get sick of people who live in luxury themselves, and constantly look at people, who often earn no more than 300 Bath with long days. A simple roof over your head is really not a luxury, especially the costs for a possible mortgage usually have to be paid by several family members. Even a simple means of transport is often financed by several people. It is certainly a fact that there are also people who cannot handle money, but we find them in all income groups. I would like to see many Farangs who fill their mouths with good advice here, how they themselves mastered their lives with a day's work for 300Bath. From time to time you get the feeling in reactions that the fed, the starving want to learn how to live, and one should really be ashamed of that.
Well said, John, totally agree.
Also consider that 10 percent of all Thais live below the poverty line. That limit is 3.000 baht per month. Seven million Thais live on less than 3.000 baht a month!!
Thailand as a whole is a fairly rich country, it belongs to the upper middle-income countries and almost to the higher income countries. Thailand is now just as rich as the Netherlands in the fifties of the last century. Thailand only has a very large inequality in income and wealth, that is the problem.
Thailand can build a social system, but that is not allowed because that is 'populist', the epithet for the policy of TS and YS.